Retention and turnover rates are complementary and both are expressed in percentages. But they're calculated differently because they measure different shifts in staffing. Human resource professionals and staffing planners are able to determine in more detail the rate at which organizations are keeping or losing workers by calculating retention and turnover separately.

Retention

Retention is the percentage of people who were on staff and remained there from the start to the end of a time period, say, a year's first quarter. Employers can track the workers in this group and extract such information as occupation, rank or age. The data could help determine whether an employer is likely to retain workers under age 40, for instance, or managers with advanced degrees. Retention calculations don't factor in workers who were on staff but left during the time period.

Turnover

Turnover is the percentage of employees who leave voluntarily in a given time period. New job offers, retirement, relocation and job dissatisfaction often trigger voluntary separations. Terminations, furloughs and layoffs are examples of involuntary separations and aren't reflected in turnover rates. Turnover can cost employers as much as 150 percent of a departing employee's salary. That figure can rise to 250 percent for managerial positions. Recruiting and hiring expenses, overtime pay for staff who "pinch-hit" for departed co-workers and production losses account for some of the high costs of turnover.

Calculations

The Society for Human Resource Management offers a formula for calculating retention and turnover. Retentions and losses are shown in the equation as fractions of the total number of workers in an organization or even one department. In the following example, a department has 10 employees, two of which left and were replaced. Retention rates are calculated by dividing the number of workers who remained, eight, by the total number of positions, 10. The figure is multiplied by 100 to get a percentage: "R (retention) = (8/10) X 100 = 80 percent." Turnover is calculated by dividing the number of workers who left, two, by the total number of positions, "10: T (turnover) = (2/10) X 100 = 20 percent.''

Adjustments

Numbers in the retention and turnover equations are adjusted to reflect staffing changes. If two workers in a department of 10 left and were replaced, and then two more left and were replaced during the same time period, the retention and turnover equations would be written as: "R = (6/10) X 100 = 60 percent" and "T = (4/10) X 100 = 40 percent."

About the Author

Valerie Bolden-Barrett is a writer, editor and communication consultant specializing in best business practices, public policy, personal finance and career development. She is a former senior editor of national business publications covering management and finance, employment law, human resources, career development, and workplace issues and trends.